ideaForge Technology IPO: Issue subscribed 3.69 times on Day 1 so far; retail, employee & NII portions fully booked

The Rs 567 crore-initial public offering (IPO) of ideaForge Technology began on a strong note today. The drone manufacturer's initial share sale was subscribed 3.69 times so far of the first day of bidding. The company has announced to sell its shares in the fixed price band of Rs 638-672 apiece during the three-day sale. The IPO received 1,71,52,080 today against the issue size of 46,48,870 shares.

As of 5 pm today, the retail individual investors, employee reserved categories and non-institutional investor (NII) categories were fully booked, 12.48 times, 8.47 times and 5.13 times, respectively. In contrast, the qualified institutional buyer (QIB) portion attracted merely 1 per cent of the total bids.

The issue includes issuance of fresh equity shares worth Rs 240 crore and an offer for sale (OFS) of 4,869,712 equity shares amounting to Rs 326.44 crore by promoters and existing shareholders. Investors can make a bid of a minimum of 22 equity shares and its multiples thereafter.

Watch: ideaForge Rs 567 crore IPO opens; check price band, GMP, subscription status. See the journey of IIT Bombay alumni-founded company

The company has reserved 13,112 shares in the public issue for its employees, who will get a discount of Rs 32 apiece for the issue. 75 per cent of the net offer is reserved for QIB, while NIIs will get 15 per cent of the offer. Retail bidders would be allocated with the remaining 10 per cent of the offer.

Ahead of its IPO, ideaForge raised Rs 254.88 crore from 31 anchor investors by allocation of 37.92 lakh equity shares at Rs 672 per share which saw participation from marquee investors including Nomura, Invesco, HSBC, Goldman Sachs among others.

Grey market premium

ideaForge shares were being traded with up to 75 per cent grey market premium (GMP) of Rs 490 today.

Net proceeds from the fresh issue would be utilized towards repayment or prepayment of certain debt availed by the company, funding working capital requirements, investment in product development and general corporate purposes.

A majority of the brokerages are positive on the issue citing the rising demand of drones, niche business model and positive outlook for the sector. However, a few have a word of caution for the issue citing its expensive valuations, lack of long-term contracts and high competition in the industry.

JM Financial and IIFL Securities are the book-running lead managers to the issue, while Link InTime India has been appointed as the registrar. Shares of ideaForge Tech would be listed on both BSE and NSE, likely on July 7.

Incorporated in 2007, ideaForge Technology is engaged in the business of manufacturing unmanned aircraft systems (UAS) for mapping, security and surveillance. These drones are capable of a wide range of mining area planning, and mapping applications. ideaForge UAVs help construction and real estate boost their operations.

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